Introduction
Ethena, a blockchain platform, is gearing up to roll out a new crypto-based product aimed at attracting traditional finance (TradFi) institutions. The company plans to launch the innovative iUSDe product in February, which is built on its synthetic dollar, sUSDe.
iUSDe: A Simple Wrapper Contract
According to Ethena’s 2025 roadmap published on January 3, the new iUSDe product introduces a ‘simple wrapper contract’ that adds transfer restrictions at the token level. This feature allows for greater flexibility and control over the token’s usage.
Target Audience
The primary target audience for the iUSDe product includes:
- Asset managers
- Private credit funds
- Exchange-traded products
- Private investment trusts
- Prime brokers
These institutions will have access to a yield-bearing synthetic dollar, which could potentially disrupt the TradFi markets.
Ethena’s Synthetic Dollar (sUSDe)
The sUSDe offers a 10% annual percentage yield (APY) to over 368,000 investors, who invested over $5.85 billion in the synthetic dollar, according to Ethena’s data.
Potential Impact on TradFi Markets
A yield-bearing synthetic dollar could attract significant attention from TradFi participants, considering the $190 trillion size of the fixed-income markets, which are the largest liquid investment class in the world.
The wealth preservation potential of a yield-generating dollar product could generate demand that is ‘several orders of magnitude larger than the entire crypto market combined, including Bitcoin,’ according to Ethena’s roadmap.
Next Logical Step for TradFi Entities
Ethena’s roadmap suggests that the next logical step for these entities following the ETFs is a dollar savings product. The futures basis is the only market large enough in crypto with the capacity for their level of demand in a dollar format.
How iUSDe Generates Yield
The synthetic dollar generates yield via staking returns and shorting Ether (ETH) perpetual futures contracts, according to Guy Young, the founder of Ethena Labs, in an exclusive interview with Cointelegraph.
Ethena’s Rapid Adoption
Ethena was the second-fastest protocol to surpass the $100 million revenue milestone in crypto history. It took Ethena 251 days to generate the first $100 million revenue, compared to second place, memecoin launchpad Pump.fun, which surpassed the milestone in just 217 days.
USDe became the crypto industry’s third-largest US dollar-based product in just 10 months, behind Circle’s USDC (USDC) and market leader, Tether’s USDt (USDT) stablecoin.
Conclusion
Ethena is preparing to launch a new crypto-based product aimed at attracting TradFi institutions. The iUSDe product has the potential to disrupt the TradFi markets and attract significant attention from investors. With its innovative features and yield-bearing synthetic dollar, Ethena is poised for rapid growth and adoption in the crypto space.
References
- Ethena’s 2025 roadmap
- Cointelegraph interview with Guy Young
- Mirror: Fastest protocols to reach $100 million in revenue